Snapshot of the Denver-area housing market from Metrolist.
The latest Denver-area housing data indicate that the market is shifting from one in which buyers are in the catbird seat to one in which sellers have the upper hand, the president and CEO of Metrolist said today, reflecting on the data released earlier this week by his organization, the largest real estate multiple listing service in Colorado.
As independent Realtor Gary Bauer reported earlier this week, sales of single-family homes in the Denver area climbed by 19 percent in May from April. In addition, the average days on market dropped 11 percent to 78 days and the average price of a home sold in May rose to $284,059, up 2 percent from April’s average of $275,241. Excluding condos, the average home sales price in the region was $307,896 in May.
“With sales and under-contract listings running more than 20 percent ahead of last year, the Denver market is showing a lot of promise,” said Kirby Slunaker, President and CEO of Metrolist. “And in terms of the past three years, inventory is at an all-time low. I think we might have a very healthy seller’s market on the horizon.”
Metrolist’s May data showed the total inventory for the Denver metro area stood at 10,591 units, a number slightly ahead of April, but down a whopping 41 percent when compared with May 2011.
“We’re hearing about reports of multiple offers on properties and we’re already seeing a steep drop in days on market for single family residences,” Slunaker said. “With about a three-month supply of available homes and another uptick in the average sales price, we have an extremely positive outlook for this summer’s housing market.”
Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee Co. and 8z Real Estate.
Can anyone at Metrolist tell us the last June there was under 11k listings?
If a 3.5% rate and the ability to sell your home quickly does not make you list right away, what will? Oh yea, better credit score and 25% equity in their current home. We should have 20k listings(potential buyers) on the market. You have to wonder if Realty Track stats are correct stating 30% of all listings in Colorado are bank owned or short sales? That only leaves 7000 “organic” listing on the market, and some of the 7k might be baby boomers(move down) or estate sales(not buying for sure). The majority of listing 2000-2009 were move up organic type and we had 20-30k of them. Now 7000. No bank owned or short sales listing will not create an addtional sale like a move up buyer. This is far from a heathy market.
Jason,
The last June when there were fewer than 11K listings was in 2000 when there were 10,482 unsold homes on the market. The same is true for May. In May 2000, there were 8,612 unsold homes on the market. Gary Bauer deserves a shout out for the historical information.
Thanks Gary! Was/is it typical to see a 20% inventory build from may to June?
Jason, The supply has only risen more than 20 percent from May to June once, at least since 1990. In 2000, the supply rose 21.7% from May to June. Last year, it rose just under 0.8%. The 2000 increase was the only double-digit, one-month increase. In 2001, the MOM inventory rose by 7.7%, the second highest on record.
Thanks Again. Go enjoy you day! I’m sure you have better things to be doing.
Sure seems like a healthy market if you are a seller selling for a record high price.
@dan
Yes, if you are a seller selling for a record high price it would seem like a healthy market. Are you saying this is the norm in the Denver real estate market or club level seats seat at Investco Field since Manning came to town. No, you must be talking about Football or you have been spending too much time at your local dispensery.
Prices are up 12% in the past year. Both average and median. That’s pretty broad. Prices will double or triple through this bull market. It’s not too late to buy, but those who don’t will be kicking themselves 5 years from now.
At Dan,
I agree with Jason. You have been ingesting too many mind-altering drugs.
“double or triple”? Not likely.
See http://3968vrain.com/English/Denver/CaseShiller_Prices.html
Even from 1990 to the peak in 2009, real prices did not even double in Denver.
Weak income growth and the still many years to go to recover from the boom of the mid-aughts will hold back price increases.
,dave
Wow Dave and Jason,
Your data and understanding of the market cycle are so flawed its hardly worth having this conversation.
Dan, I don’t know how flawed my understanding of the cyclicality of real estate is, but I do understand that going forward the real estate market will surely not operate on true free market principals. In order for your prediction, the average price of a home in Denver to double or triple(go from 300k to 600-$1M) the government’s hand will need to make it happen. Regulators, FED, Congress, FHA, Fannie/Freddie(or what they morph into), will need to be willing to let the price of home go parabolic again. This will NOT happen. Once home prices get to the high water mark again, you can look for 2-3% YoY price increases. See Dan, the housing market is not the free market. It is set by buyer, sellers, appraisers, congress, wall street, the white house via bank regulation. Do you really think you will see the lack of oversight that lead to to S&L crisis or the last housing debacle anytime soon? Do you really expect the FHA loan limit to be raised to 1M? That will be a prerequisite for that type of appreciation. Do you really think private label securitization be allowed to “pump and dump” in our lifetime again? Once the market comes back it will become extremely boring. Like the housing market your grandparents lived through.
No, but its really quite simple. Supply and demand will contribute to prices doubling within 5 years. Inflation will contribute to another 100-500% gain depending on the severity. Those who buy rentals locking in very low rates will see their mortgages effectively wiped out and their real net worth surge.
Dan- just an FYI
After the 100% gain, making the average price home 600k, another 500% gain make the average priced home in Denver $9,600,000 I don’t know if you are a big fan of Glen Beck or if your hero in life is Robert Mugabe, but it’s not going to happen.
Dan, unlike other item that can easily be bought and sold without the government knowledge(ie eBay, craiglis), housing is unique. The government is involved since you need to record a deed. All they need to institute price controls in the form of a transfer tax like New York city and they control price. If you make it high enough demand will fall. I hate to break this to you, but the fate of housing is in govt hands, up or down. Without government support now the housing market would implode. FHA, Fannie and Freddie are originating 90% of all loans today.
Once again, I can’t have this conversation if you can’t do 3rd grade math.
Oops, my mistake it’s ONLY $2,000,000.
@Dan
I admire you gumption. I won’t get into all the reasons I think your premise is flawed, but I will give you what I personally won’t do if your prediction comes true. It’s sell my house and move. If home prices triple the average price will go from $300,000 to $900,000 and with inflation, interest rates will likely be 7%-12%. The likelihood of me letting my 3.75% rate go is highley unlikely. I will remodel. Yes, people will move, but home price are set at the margin. The marginal buyer will stay put. From 1995-2008 rates in general fell, giving incentive for the marginal buyer to move. Sorry Dan you are wrong on this one.
And Dave, thanks for being so nice to me lately.
@ Dan
Your 12% increase comes from Metrolist’s calculation? Otherwise known as a 3th grade math problem. They just take the total dollar volume and divide by the number of homes sold. This does not tell you much. Did more of fewer 1m+ homes sell than last year? It does not look at all st the mix Although, case Shiller and others who use complex algorithm’s to calculate home prices are a much more lagging indicator, they are much more accurate. If case shillers shows may number up 12%, I will agree with you. But, for now a 3th grade problem won’t convince me. I do think prices are rising, just not as much as you think. These anecdotal stories of multiple offers are true, but Highland, Hilltop and Congress Park makeup a very small percentage of the overall market. Aurora, Parker and Highlands Ranch make up a much bigger percentage and I would bet frantic buying is not as common.
Im wrong again. I forgot the 1st 100% increase to 620,000 before the additional 500%. That would make the average price home only $4,000,000.
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